The effects of extortion and security device adoption on entrepreneurial entry and exit: Evidence from Guatemala

• 成果类型: Article
• 署名作者: Estefan, Alejandro; Ordonez, Romina
• 署名单位: University of Notre Dame; Inter-American Development Bank
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2025.105464
• 发表日期: 2025
• 关键词: Microentrepreneurship; extortion; Latin America; crime

摘要

Using survey data and administrative records from franchise stores of a multinational company operating in Guatemala's food retail sector, we document stylized empirical facts about extortion of low-income microentrepreneurs and the protective impact of security cameras. Extortion curtails market entry, increases exit, and lowers economic competition. Security cameras reduce exit and improve competition. To rationalize these findings, we propose a standard model of industry dynamics in which we incorporate extortion as a sales tax and security devices as a costly investment that lowers the probability of victimization. We structurally estimate the model to conduct counterfactual policy simulations and compare the effectiveness of security cameras with that of alternative security devices.